Targets and Quotas for Women in Leadership

 A Global Review of Policy, Practice, and Psychological Research

This study was one of the four core programs undertaken as part of the Gender Equality Project and was published in July 2012. It was completed while the CEL was located at Melbourne Business School, and as such some of the periphery information regarding the CEL (such as contact details) may have since changed.

For more information regarding this paper, the CEL or the Gender Equality Project; please Contact Us.

Executive Summary

In Australia and many other countries, increases in the number of women in senior leadership roles within most corporations have been small and slow to occur. The underemployment and underutilisation of women has been costly for nations and organisations alike. However, even where the benefits of increased gender diversity are recognised, existing strategies seem to have peaked in their impact on the numbers of women employed in tradi­tional male roles, including senior leadership. This has led to the question of “what other strategies can be used?”

In response to this question, many industry, public sector, regulatory and international organisations have rec­ommended the establishment of targets or quotas for the number of female leaders to be recruited and promoted into leadership roles. The use of quotas for parliamentary representation is widespread across the world but few companies employ quotas. The use of targets is more widespread amongst companies but the lack of systematic reporting makes it hard to determine just how widespread.

Targets and quotas do make a difference to the numbers of women in targeted senior leadership roles, including board and senior management roles. In Norway, following the legislation of quotas, women’s representation on boards rose from 7% in 2003 to 40.3% in 2010. In Australia, following the ASX requirement for the disclosure in each annual report of the measurable objectives for achieving gender diversity and progress towards achieving them, women comprised 27% of all new board appointments in 2010, up from just 5% in the previous year.

Targets and quotas evoke negative reactions although there is little systematic research on their impacts on individuals and work cultures. Studies of the reactions to affirmative action policies in the USA have found that women who are appointed under the policies are seen as less qualified, less competent and less legitimate in their role by both men and women, including the women who are appointed under affirmative action. Surprisingly, considering the widely held view that targets and quotas are anti-meritocratic, there is no research evidence that women appointed under targets or quotas are less competent or perform less effectively than the men they may have replaced or women appointed under processes without gender targets or quotas.

There is however, widespread evidence that specific, measurable and challenging targets are heavily utilised and highly effective in other areas of managerial work. Most managers are assigned performance targets for which they are held accountable and for which their achievement impacts on rewards, such as short and long term in­centives and ultimately promotion opportunities. We argue that assigned gender targets for which managers are held accountable and, where appropriate, rewarded for achievement, would be similarly effective for diversity with some strategic reimagination about how to achieve those targets. Effectiveness of targets would be further enabled if accompanied by organisation specific support strategies and organisational efforts to remove con­straints on the acceptance and commitment to gender targets due to mindsets, culture, systems and processes.

In summary, based on the evidence available for this report, we recommend:

  1. The setting of gender targets for the leaders of work units within organisations, particularly at top executive levels. Targets should be linked to performance and to “at risk/variable” remuneration.
  2.  Annual public reporting by organisations on number of women in leadership roles, and the strategies implemented to increase the number of female leaders and the impacts of these strategies on attitudes, culture and performance.

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